Steven Rattner, Ex-Car Czar, Settles SEC Charges, Then Gets Hit With Another Lawsuit

WASHINGTON — The Obama administration's former auto czar agreed Thursday to pay $6.2 million to settle civil charges over his role in an influence-peddling scandal involving New York state's public pension fund.

The Securities and Exchange Commission announced the settlement with investment banker Steven Rattner. As part of the settlement, Rattner will also be barred for at least two years from working in the securities industry.

The SEC alleged that Rattner and his private-equity firm Quadrangle Group provided kickbacks, political favors and personal benefits in 2004-05 to get access to business from the state's $125 billion pension fund.

Rattner neither admitted nor denied the charges that were filed in a federal court in Manhattan. But he agreed not to violate the securities laws in the future. The settlement, which must be approved by the court, calls for Rattner to pay a $3 million fine and about $3.2 million in restitution.

In a separate but related action Thursday, New York Attorney General Andrew Cuomo filed two suits against Rattner also accusing him of paying illegal kickbacks to help Quadrangle land a lucrative investment from the pension fund.

Cuomo is seeking at least $26 million from Rattner and a lifetime ban from the securities industry.

Rattner, a major political fundraiser for Democrats and influential policy figure, left the firm last year to become co-leader of the White House task force that restructured General Motors and Chrysler. He left the government in July and has been promoting his new book on the auto industry since.

The money Rattner is paying to settle the charges represents a fraction of his wealth. He reported net worth last year of between $188 million and $608 million. But banning him from the industry, even a temporarily, could greatly limit his earning potential.

Comments

[studmoose]

11:51 AM on 11/20/2010

"Cuomo is seeking at least $26 million from Rattner and a lifetime ban from the securities industry."

That should have been part of the first penalty.

[Dawg1000]

11:05 AM on 11/20/2010

One does have to wonder about the people President Obama seems to be perfectly comfortable keeping around him, by way of his appointments.

[AndrewDover]

06:55 PM on 11/21/2010

Well, Rattner was pushed out after a few months.
See http://tpmmuckraker.talkingpointsmemo.com/2009/07/did_pay-to-play_probe_cause_rattners_resignation.php

[ndem]

11:07 AM on 11/19/2010

I am so angry at these guys who have used corrupt practices to access pension funds all the while making a killing in fees! This guy needs to be kept away forever not just two years and he should also have to apologize publicly to Obama for bringing disgrace to his former role a car czar.

We are OVER these guys! They all know one another, scratch each other's backs and were in on the whole swap, flip, no there there economy which made them rich and our country and others poor!

[bllnsinchnge]

09:50 AM on 11/19/2010

So corrupt, I hope Cuomo exposes everything.

[MandibleExtraction]

07:56 AM on 11/19/2010

The seventh paragraph is truly hilarious in its misleading factual basis. He was part of the government bail out system from January/February 2009 and out by July 2009. He was out in July 2009 because of all the scandal surrounding the facts of the Quadrangle/New York State Pension story were coming to light. He left in bad standing. He left DC in shame. He was not wanted at Quadrangle. He wrote a book and waiting for the SEC to rule on him- which they just did.
The timing of the above article is off by one whole year.

[jmdziuban1]

12:40 AM on 11/19/2010

Estimated net worth between 188 and 608 million last year, but this could impair his future earning ability. I think he already has well enough already, he'll be fine. I suppose what he'll really miss is the deal making

[dukeitout]

09:07 PM on 11/18/2010

Why isn't this treated as a crime? Isn't it really theft? If it's not theft, why should kickbacks be considered illegal?

[Bankerrkt]

08:54 PM on 11/18/2010

Another great pick by the Professor .... and this guy wasn't even from Chicago.

[Herbert Spencer]

07:47 PM on 11/18/2010

And Rangle? Boy, if they were Republicians you libs would DEMAND they go to JAIL! LEFTWING CORRUPTION IS GOOD CORRUPTION! Clinton committed purjury BUT the LEFT DEMANDS THAT LIBBY GO TO JAIL!

[phread]

07:45 AM on 11/19/2010

bush lied to start a war...corruption is bad period

[2garen]

06:56 PM on 11/18/2010

Barred for 2 years? I don't think so. This man needs to be barred permanently.

[gaudeamus]

06:39 PM on 11/18/2010

why should a man so tainted with infractions be selected for such a sensitive position? WTF is POTUS thinking? doesn't he vet anyone? the man seems to shoot himself in the feet so often, I've come to expect it! every day seems to reveal a new stench! what is wrong with him?

[amdezurik]

07:03 PM on 11/18/2010

is the word "former" to advanced for you?

[Lieber Tarianz]

07:32 PM on 11/18/2010

Vetting is done prior to employment....not after.

[gaudeamus]

08:08 PM on 11/18/2010

I feel so chastised. by the way, the proper word for your comment is "too." so much for advanced english composition.

[jcgrim]

06:26 PM on 11/18/2010

Rattner should be in jail.

[Arashi]

04:59 PM on 11/18/2010

At least it'll keep him busy and off the streets.

[thejulianwright]

04:40 PM on 11/18/2010

having a contest with my friends to see who can get the most tumblr followers by Christmas. giving an iPad to one of my followers. thanks!

follow me: http://www.thejulianwright.tumblr.com

[3 magi]

03:29 PM on 11/18/2010

What ?...no jail time ?